Debit card with activation control

ABSTRACT

A secured debit card package having an embedded value and being adapted to be sold from open and unprotected retail shelving. The secured debit card package comprises a debit card, formed as from a first material bearing a card identification number, and packaging means formed as from a second different material securing the debit card thereto, the packaging means defining a window through which the card identification number is visible, a magnetic stripe disposed on the packaging means, the magnetic stripe bearing an encoded representation of a card identification number borne by the debit card, the stripe being positioned to be scanned by a terminal for reading the encoded representation from the packaging means and for transmitting the encoded representation to a remote processing center for testing of the representation to determine whether the debit card should be activated. A method for providing security for the embedded value of a debit card is also disclosed.

This is a continuation of application Ser. No. 09/902,874, filed Jul.10, 2001, now U.S. Pat. No. 6,454,165.

FIELD OF THE INVENTION

This invention relates generally to debit cards and in particular to adebit card that functions as a prepaid telephone calling card, and ismore particularly directed toward a debit card having activation controlto forestall fraudulent debit card use.

BACKGROUND OF THE INVENTION

Credit cards and charge cards are well-known. A credit card entitles theuser to revolving credit, in which at least a portion of the outstandingbalance must be paid periodically, while the entire balance due on acharge card must ordinarily be paid within a prearranged time.

A debit card allows the bearer to utilize the same purchasing process aswith a credit or charge card, with the exception that the holder of adebit card must maintain a nonzero balance in an associated account atall times. Use of a debit card does not involve the extension of creditto the bearer, thus the name “debit card.”

Since many transactions once involving the exchange of cash orcommercial paper have become strictly electronic, use of credit anddebit cards in a wide variety of transactions has grown rapidly. Debitcards with intrinsic cash value are becoming available at retailoutlets, with the purchase of long distance telephone services beingamong their current primary purposes.

A debit card with intrinsic cash value has no need for an associatedaccount. When these cards are made and transmitted for sale ordistribution, they are good for a predetermined dollar amount of goodsor services, and the purchaser pays all or a portion of this dollaramount in exchange for the card. To minimize overhead associated withmanufacture and distribution, cards of this type are generally usable atthe time they are shipped from their point of origin.

Of course, one disadvantage of this approach is that active andcompletely usable debit cards often hang from display racks in retailoutlets, where even a marginally clever sneak-thief could shoplift asmany as he pleased. Stolen debit cards are often sold to others atdiscount prices, or used by the thief.

Active and usable cards could also be stolen in transit to their pointof sale with the same result. Because of the effort to minimizeproduction and distribution overhead, there may be no record of theindividual serial numbers of stolen cards, and no way to deactivate themeven if the numbers were known.

Some efforts have been made to minimize the risk of card fraud. In thesimplest scheme known in the prior art, the authorization code, such asa PIN, or personal identification number, is hidden from view byassociated packaging. This prevents a thief from simply writing down thePIN and enjoying free long-distance calling without even havingpossession of the calling card itself.

In the operation of a debit card system, a special telephone number isnormally dialed by the user, followed by the PIN number from the debitcard. The user then dials the number of the party he wishes to call. Acentral data base keeps track of the remaining balance associated withthe user's PIN number, and refuses further service after the balance hasbeen reduced to zero. Some prepaid debit card companies provide arecorded message to the user when the debit card balance has beenreduced to a predetermined small amount.

The act of concealing PIN numbers from view helps to deter casual theftby simple observation of a visible PIN number, but does not preventtheft of services by one who pilfers the card itself. A more effectivedeterrent is the distribution of inactive cards only, which cards mustbe activated at a point of sale before they will function as callingcards.

In one known prior art development, shown in U.S. Pat. No. 5,511,114,blank debit cards are transported to distribution points in aninactivated state. The process for initially activating or rechargingsuch cards involves selection of information via the keys of anappropriate terminal, as well as transmission of an identificationnumber associated with the card. Once a particular transaction type,such as recharging, is selected on the terminal, and the cardidentification number has been transmitted, the operator enters a dollaramount and is prompted by the terminal to collect money from thepurchaser. The remote data base with which the terminal is in contactcreates a data base record in response to terminal input, and sends aconfirmation back to the terminal. For the type of card transaction justdescribed, the terminal itself is the authorizing instrumentality.

For a simple activation transaction not involving recharging of a card,the operator must still input a transaction type and an initial dollaramount via the terminal, and transmit the card identification number,before authorization can proceed. The remote data base creates a database record in response to operator input transmitted from the terminal,and returns a confirmation to the terminal that the card identificationnumber has been received. Once again, actual authorization of the cardtakes place at the terminal, while the remote data base performs abookkeeping function.

In another prior art system, a paperboard blank having several sectionsis formed. A first full-sized panel is connected along a line ofserrations to a second full-sized panel. A third narrower panel issecured via a line of serrations to the second panel. The third narrowerpanel secures a smaller sized, prepaid debit card thereto along a lineof serrations. The first panel is coated to provide a glossy finish. Thesecond panel bears a magnetic stripe applied as a tape. The debit cardis specially coated on both sides and has a PIN number or authorizationcode printed on the front of the debit card. The PIN number is appliedat substantially the same time information is applied to the magneticstripe. Eventually the third panel is infolded against the second panel,the folded second and third panels are infolded against the first paneland the first panel and infolded second and third panels are securedadhesively to each other. The stripe on the folded blank may thereafterbe scanned at a cash register, and the debit card is thereafteractivated in response to the scanning, as via a remote computer.

A need exists for an improved secure debit card system having simpleactivation control.

SUMMARY OF THE INVENTION

These needs and others are satisfied by the present invention, whichcomprises a secured debit card package having an embedded value andbeing adapted to be sold from open and unprotected retail shelving. Thesecured debit card package comprises a debit card formed from a firstmaterial bearing a card identification number, and packaging meansseparate and distinct from the debit card and mounting the debit cardtherein, the packaging means defining a window through which the cardidentification number is visible, a magnetic stripe disposed on thepackaging means, the magnetic stripe bearing an encoded representationof the card identification number borne by the debit card, the stripebeing positioned to be scanned by a terminal for reading the encodedrepresentation from the packaging means and for transmitting the encodedrepresentation to a remote processing center for testing of therepresentation to determine whether the debit card should be activated.

The debit card may bear first and second card identification numbers,with the first card identification number comprising a PIN number, andwherein the packaging means obscures the PIN number on the debit cardwhile rendering the second card identification number visible throughthe window. The card identification number may be displayed in a barcode format and/or in a human readable format. The package comprises asubstantially opaque paper backing with a substantially transparentplastic film covering the debit card.

In accordance with another aspect of the invention, a method isdescribed for providing security for the embedded value of a debit cardadapted to be displayed and sold in an unsecured environment such as aretail establishment. The method comprises the steps of providing adebit card having an embedded value with a card identification number,securing the debit card within the package and defining a window throughwhich the identification number is visible, providing a magnetic stripeon the package, reading the card's identification number through thewindow, providing an encoded representation of the card identificationnumber on the stripe, the magnetic stripe being positioned on thepackage to be presented to a terminal for reading and transmission ofthe encoded representation to a remote computer; whereby, when theremote computer receives the encoded representation, the remote computermay determine whether the embedded value is authorized for use.

The debit card may bear first and second card identification numbers,with the first card identification number comprising a PIN number, andwherein the package obscures the PIN number on the debit card whilerendering the second card identification number visible through thewindow.

The method comprises the further step of receiving the encodedrepresentation at a remote computer and determining whether the embeddedvalue is authorized for use. The remote computer may test the receivedencoded representation for an anticipated association with the terminalfrom which the encoded representation was transmitted. The debit card isactivated when the anticipated association is present.

In another form of the invention, a debit card system with activationcontrol comprises a debit card bearing a card identification number, apackage substantially surrounding the debit card, the package beingadapted to make the card identification number visible therethrough, amagnetic stripe disposed on the package, the magnetic stripe bearing anencoded representation of the card identification number, a terminaladapted to read a representation of the card identification number fromthe package and transmit the representation to a remote processingcenter, the terminal having a terminal identification number, and aremote processing center for testing the representation and activatingthe debit card for use by a purchaser.

The debit card may bear first and second card identification numbers,with a first card identification number comprising a PIN number, andwherein the package obscures the PIN number on the debit card whilerendering the second card identification number visible.

The remote processing center may test the representation of the cardidentification number and the terminal identification number, and, if ananticipated association exists, activate the debit card for use by apurchaser.

The terminal adapted to read a representation of the card identificationnumber may read the representation of the card identification numberfrom the magnetic stripe, or from the debit card through the package.The anticipated association may comprise a correspondence between thegeographic location to which the debit card was shipped and thegeographic location of the terminal identified by the terminalidentification number.

Further objects, features, and advantages of the present invention willbecome apparent from the following description and drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a front elevational view of a debit card package in accordancewith the present invention;

FIG. 2 is a side elevational view of the debit card and package of FIG.1;

FIG. 3 is a rear elevational view of the debit card and package of FIG.1; and

FIG. 4 is a block diagram representation of a debit card system inaccordance with the present invention.

DETAILED DESCRIPTION OF THE INVENTION

In accordance with the present invention, a debit card with activationcontrol is described that provides distinct advantages when compared tothose of the prior art. The invention can best be understood withreference to the accompanying drawing figures.

FIGS. 1-3 depict a debit card 100 and an associated package 200 inaccordance with the present invention. The card or document 100 isfabricated from a suitable first material, such as plastic, paper, aplastic-coated paper, or laminates. Use of the debit card 100 generallyrequires that a personal identification number, or PIN, be enteredduring the course of the transaction. In telephone debit cardapplications, entry of the user's PIN would normally occur after theentry of an access telephone number, but before the user dials thecalled telephone number. The location of the PIN number 101 on the debitcard 100 is hidden from casual observation by the package 200.

The debit card 100 is typically made of plastic in a thickness range offrom about 0.005 to about 0.040 inch. It is made separate and apart fromthe package, is usually of a different material and is collated with thepackaging during the assembly process. The debit card 100 is usually ofplastic, although it may be a laminate as well.

The package 200 is formed from a suitable second material 201, such aspaper. It is usually of a board stock, and may be made of a 15 pointcoated one-side board stock, although it may be a laminated board orother laminate. The package 201 is desireably distinct and separate fromthe debit card and typically of a different material. Preferably, thepackage backing material is opaque, in order to obscure the PIN numberon the debit card 100, as described above. A transparent shrink wrapplastic film 203, applied using well-known methods, covers the debitcard 100 and secures the debit card 100 to the package 200. In thealternative, a transparent plastic cover with an appropriately sized,generally rigid, embossed area accommodating the card 100 may be affixedto the backing sheet 201 as by a conventional adhesive, and forming astructure commonly known as a “blister pack.” This alternative packagingarrangement is not illustrated.

The debit card 100 also bears a card identification number 102. A windowor opening 103 is provided through the back of the package 200 so that acard or document identification number 102 is visible therethrough. Ifthe card identification number is on the front of the card, thetransparent portion of the package may serve the window function. Thedocument identification number may be provided in machine readable form,such as a bar code, and may also be provided in human readable form.

The package 200 also includes a magnetic stripe 202 of conventionalconstruction, such as one deposited from a slurry, positioned on thepackage 200 so that it can be scanned in well-known magnetic stripereading equipment. Such magnetic stripe readers are common in retailestablishments for credit card transactions. A terminal such as a Tranz380 made by Verifone is suitable in this application.

Encoded on the magnetic stripe 202 on the package is a representation ofthe debit card identification number. For purposes of security, the PINnumber 101 will not normally be encoded on the magnetic stripe 202, butthe card identification number 102, or another number borne by the debitcard 100, will be selected for encoding in the appropriate magneticformat. For additional security, the selected number may also besubjected to an encryption algorithm, many of which are well-known inthe art, prior to encoding on the magnetic stripe 202.

It is apparent that the debit card may be enveloped within an opaquepackage, as of one made of a board stock. The card may be secured to oneinner face, as via an adhesive body, and located so that the documentidentification number is visible through a window. Thus, it may be readtherethrough for “entry” onto the magnetic stripe 202.

Although the PIN number is shown as being in a human readable form foruse as described above, it may be present in a variety of other forms aswell. Thus, it could as be in the form of a bar code to be scanned by ascanner at the time the card is to be identified by the data base. ThePIN number could also be entered on a magnetic stripe on the debit cardfor scanning or could be available from a chip and related circuitry ifthe debit card was constructed as a so-called smart card. When such acard was presented to a suitable reader, the debit card could beidentified for use.

In accordance with the present invention, a method of making a secureddebit card package for display and sale in an unsecured environment suchas a retail establishment is provided. As has been seen, the methodcomprises (a) providing a plurality of pre-formed debit cards 100 of afirst material, each debit card bearing a card identification number 102and each debit card having an embedded value, (b) providing a pluralityof packages 200, each package being adapted to house a debit card, eachpackage defining a window such as window 103, and having a magneticstripe 202, (c) securing a debit card to a package with the cardidentification number being visible through the window, and aftersecuring the debit card to a package, (d) then reading the cardidentification number through the window and applying an encodedrepresentation of the debit card identification number to the magneticstripe 202. As such, when the magnetic stripe 202 is presented to aterminal, such as to a terminal 402, for reading the encodedrepresentation, the representation may be transmitted to a remotecomputer for authorizing the use of the embedded value.

FIG. 4 illustrates a debit card system 400 in accordance with thepresent invention. The system is adapted to respond to a plurality ofdebit cards 401, with each of the debit cards 401 bearing anidentification number 102, 102′, etc., either on the packaging or on thecard itself, in machine readable form.

Of course, a machine readable format may mean a magnetic stripe 202 asdescribed above. Each of a plurality of data terminals 402 preferablyincludes a magnetic stripe reader. Each terminal 402 may also include analternative input means 403, such as a bar code reader or opticalcharacter reader, for example, for inputting card identificationnumbers.

The terminals 402 are connectable to a remote processing center or hostcomputer 405 as via a suitable network, such as the public switchedtelephone network (PSTN) 404. Each of the terminals 402 has anassociated terminal identification number, and this may be transmittedto the host computer 405 during the course of connecting a terminal 402to the host computer 405.

Associated with the host computer 405 is a data base. The data base hasa record for each debit card 401, with each record including anidentification number associated with each debit card 401. When cards401 are shipped to a retail distribution point, the card numbers may berecorded in the data base along with other desirable indicia, such asthe destination retail establishment. The cards 401 are shipped in aninactivated state in order to minimize potential losses due to theft,fraud, or mishaps in transit, and to allow the cards to be displayedwith impunity in open and unprotected retail shelving, because they arenot usable without deliberate activation at a retail establishment.

When a card 401 is to be sold, it is presented at a check-out station,as to a check-out clerk. In a preferred form of the invention, the clerkswipes the magnetic stripe through a terminal 402, such as a VerifoneTranz 380. The reader transmits the encoded representation of the cardidentification number to the host computer 405 via the terminal 402.Upon receipt of the encoded representation, the processing portion ofthe host computer 405 tests the encoded representation to determinewhether the debit card 401 should be activated for use, as by scanningthe associated data base to determine that the card has not been stolen,that the card is genuine, etc. If the card is determined to be one whichshould be honored, the PIN number associated with the debit card willthen be activated for use, so that the purchaser of the card may use it.

The host computer 405 may also test the received card identificationnumber for an anticipated association. Since the identification numbersof the cards shipped to a particular customer may have been recorded,and the identification numbers of the data terminals 402 associated withthat customer may also be known, the host computer may check whether theactivation transaction is originating from a data terminal 402associated with the intended customer. If so, the card 401 is activated.If not, activation of the card 401 is refused.

An activation transaction of this type requires no additional input fromretail personnel. The identification number of the card 401 need only beread by an appropriate data terminal 402, and activation of the card iseffected by the host computer 405. Of course, if activation is refused,an appropriate message could be transmitted to the originating dataterminal 402, just as refusal to complete a credit card transactionwould be signalled to the originating data terminal.

There has been described herein a debit card with activation controlthat is relatively free from the shortcomings of the prior art. It willbe apparent to those skilled in the art that modifications may be madewithout departing from the spirit and scope of the invention.Accordingly, it is not intended that the invention be limited except asmay be necessary in view of the appended claims.

What is claimed is:
 1. A debit card package having an embedded value inbeing adapted to be sold from open and unprotected retail shelving, saiddebit package comprising: a) a debit card bearing at least one cardidentification number on a first surface thereof; b) packaging means forthe debit card, and defining a window in said packaging means throughwhich said at least one card identification number is visible; and c)encoded representation of said at least one card identification numberwhich is visible through said window, said encoded representation beingpositioned to be scanned by a terminal for readings said encodedrepresentation from the packaging means and for transmitted said encodedrepresentation to a remote processing center for testing of saidrepresentation to determine whether said debit card should be activated.2. The debit card package of claim 1, wherein said debit card bears twocard identification numbers and wherein a second card identificationnumber comprises a pin number, and wherein said packaging means obscuresthe pin number on the debit card and renders the one card identificationnumber visible through said window.
 3. The secured debit card package ofclaim 1, wherein said encoded representation of said one cardidentification number comprises a bar code.
 4. A debit card packagehaving an embedded value in being adapted to be sold from open andunprotected retail shelving, said debit package comprising: a) a debitcard bearing at least one card identification number on a first surfacethereof; b) packaging means for the debit card, and defining a window insaid package through which said one card identification number isvisible; and c) a bar code representing an encoded representation ofsaid one card identification number which is visible, said bar codebeing positioned to be scanned by a terminal for readings said encodedrepresentation from the packaging means and for transmitted said barcode to a remote processing center for testing of said representation todetermine whether said debit card should be activated.
 5. The debit cardpackage of claim 4, wherein said debit card bears two cardidentification numbers and wherein a second card identification numbercomprises a pin number, and wherein said package obscures the pin numberon the debit card and renders the one card identification number visiblethrough said window.